In the world of ecommerce, FBA (Fulfilled by Amazon) is one of the most used phrases. Now, get ready to use WFS (Walmart Fulfillment Services) just as frequently. Walmart Fulfillment Services launched in February 2020, putting Walmart in a better position to compete with Amazon. Walmart Fulfillment Services is a fulfillment network owned and operated by Walmart. It allows brands who sell on Walmart to ship inventory directly to Walmart’s fulfillment centers for storage and order fulfillment for goods purchased on Walmart.com.
Before Walmart Fulfillment Services, brands who sold on Walmart.com had to fulfill orders through a dropship model or through a third-party logistics (3PL) provider. The dropship model placed all order fulfillment and customer service responsibilities onto sellers, and the 3PL model could be cost-prohibitive for certain items.
This fulfillment situation made selling on Walmart difficult for some sellers and brands. Walmart Fulfillment Services improves the selling experience for Walmart’s Marketplace by providing sellers a solution for storage, 2-day fulfillment, customer service, and return management, all competitive with Amazon’s FBA capabilities.
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The Walmart Marketplace is quickly growing, and now is the time for brands to position their products on the marketplace. Marketplace Pulse reported that in June 2020, over 3,500 sellers joined the Walmart Marketplace, bringing the total number of sellers to 48,332, with most being dropship sellers.
Amazon’s FBA program set the bar exceptionally high for online shopping convenience, and consumers now expect fast shipping for their online purchases. According to Walmart, consumers are less likely to convert on offers with a 5+ day shipping window, whereas items with a 2-day offer can see a 30% conversion lift. Brands and sellers who can offer nationwide 2-day shipping on their products can enroll in Walmart’s TwoDay Program, resulting in improved searchability and Buy Box percentage.
Logistically, fulfilling nationwide orders in 2-days can be challenging for sellers and brands. Such capabilities require a vast infrastructure – an infrastructure that Walmart already has thanks to its thousands of physical store locations across the US.
Items fulfilled through Walmart Fulfillment Services are guaranteed nationwide 2-day shipping. On top of that, products in Walmart Fulfillment Services also capture a larger share of the Buy Box over all other offers, including non-WFS 2-day offers. Products sold through Walmart Fulfillment Services will display “fulfilled by Walmart” on the products, which Walmart hopes will increase consumer trust in product authenticity.
During the onset of the coronavirus pandemic in the US, Amazon’s fulfillment network struggled under the strain, and they were unable to maintain 2-day shipping. Walmart, on the other hand, was. Products fulfilled through Walmart Fulfillment Services maintained the 2-day shipping guarantee throughout the pandemic. While Walmart handles far less volume than Amazon currently, the difference is a promising indicator that Walmart is building a robust infrastructure.
Walmart Fulfillment Services offers consistent storage fees that are comparable to FBA, with monthly storage fees starting at $3.45/unit. Walmart also states there are no long-term storage (LTS) fees, a stark contrast with Amazon’s FBA. However, if inventory stagnates in Walmart Fulfillment Service, it seems likely that Walmart would implement LTS fees to incentive liquidation and better inventory forecasting.
This simple fee structure help sellers forecast the profitability of each shipment going into the Walmart Fulfillment Service network. Amazon’s storage fees are more complex, with monthly storage fees increasing in Q4 and LTS being applied monthly to items that have been housed for over a year. For most of the year, Amazon’s monthly storage fees are $0.48-.75 per cubic foot (depending on size) and from October to December, these fees increase to $1.20-$2.40 per cubic foot.
Another notable difference between Walmart Fulfillment Services and FBA is that, for the moment, brands only have to ship to one Walmart fulfillment center. The single ship-to location provides a much simpler process for brands than Amazon FBA, which requires brands to ship inventory to multiple fulfillment centers. This situation will likely change in the future as Walmart’s online operations continue to expand, but for the time being, it’s a pleasant perk of Walmart’s system.
We’ve mentioned differences in pricing models and ship-to locations, but how else does Walmart Fulfillment Services differ from FBA?
Read about Walmart’s new subscription service that will rival Amazon Prime, Walmart Plus.
While FBA does offer deeper reporting to sellers and the extra service of fulfilling orders for select websites off Amazon, Walmart is quickly enhancing their reporting. Walmart has made impressive improvements to their reporting over the last three months, including working closely with their approved sellers on creating dashboards. These dashboards will help sellers understand product performance, as well as identify which products not yet sold on Walmart have the highest opportunity to perform well on the platform.
Unlike Amazon’s Seller Central, Walmart’s Seller Portal currently does not offer the ability to create box labels or shipping labels required for shipping to Walmart’s fulfillment center. As a result, prepping shipments can be a manual process.
Product Requirements for Walmart Fulfillment Services
Walmart Fulfillment Services’ product requirements are a bit stricter than FBA requirements. Learning from some of Amazon’s missteps, Walmart is working hard to prevent counterfeit items from polluting its platform and keep warehousing to a minimum. Below are a few Walmart Fulfillment Services product requirements and how they differ from FBA.
Selling on Amazon has taught brands the importance of keeping channel control. If brands do not sell their products on a marketplace, someone else will, and unfortunately, rogue sellers are not known for providing the best representation for brands.
Walmart is growing quickly, which means that now is the time to position your brand on the platform before someone else does. The Walmart Marketplace is the second largest marketplace in the US, with over 400 million website visits per month. In the second quarter of 2020, Walmart reported that their ecommerce sales grew 97%. By being an early adopter, brands can position themselves in front of a larger audience and ahead of competitors.
If you want to learn more about how Walmart Marketplace compares to Amazon, visit our post “Amazon vs Walmart.” It covers the two company’s history, size, customer base, marketing services, fulfillment options, subscription programs, challenges, and growth.
Walmart Fulfillment Services is currently open only to select sellers, and so far, the number of sellers approved to sell is low. Walmart wants to limit the risk of counterfeit sellers entering the marketplace, which is easier to do with a smaller number of trusted sellers. As such, it is unclear if Walmart will move to a less strict approval process for Walmart Fulfillment Services.
We were among the first group of sellers personally invited to sell Walmart.com in 2016, and we are an approved WFS seller. We’ve had an excellent experience with the program. Our account manager is easy to contact, and the Walmart team has provided reporting to help grow our product selection. By partnering with Kaspien for Walmart, brands can draw from our Amazon expertise and leverage our proven marketing strategies and software services to help their brand grow on the Walmart Marketplace.
Want to learn about selling on Walmart.com? Check out our free eBook!